Low-Cost Services Contribute to Unnecessary Health Spending

Costs associated with low-cost, and low-value health services are almost twice as high as those of high-cost, low-value services.

HealthDay News — The costs associated with low-cost, low-value health services are nearly twice as high as those of high-cost, low-value services, according to a study published in Health Affairs.

John N. Mafi, MD, MPH, from the University of California, Los Angeles, and colleagues examined which of 44 low-value services contribute the most to unnecessary costs. For their analysis, they used 2014 data from the Virginia All Payer Claims Database for 5.5 million beneficiaries.

The researchers found that 93% of the 1.7 million low-value services used were low- and very-low-cost, compared with 7% that were high- and very-high-cost, low-value services.

The total cost for low- and very-low cost services was nearly double that of high- and very-high-cost services (65% vs 35%; $381 million versus $205 million, respectively). Overall, more than $586 million, or $9.90 per beneficiary per month, was spent unnecessarily on these low-value services.